WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.

The Bill empowers the Australian Communications Authority to
issue determinations for the collection of taxes from licensees of
the radio spectrum (the range of frequencies within which
radiocommunications are capable of being made).

As from 1 July 1997, the management of Australia's radio
spectrum is now the responsibility of the newly created Australian
Communications Authority (ACA).The ACA is the amalgamation of the
non-competition functions of the telecommunications regulator
AUSTEL and the Spectrum Management Authority.The ACA was created as
consequence of the deregulation of the Australian
telecommunications industry.

In the past, the licensing of radiocommunications was tied to
the radio apparatus i.e transmitter and receiver.With the advent of
technological advances in telecommunications, the preferred
approach now is for the relevant government agency to auction and
licence radiofrequencies within the spectrum itself.Apart from
revenues generated from the auction of the spectrum, a tax is also
levied to provide revenue for the maintenance of the
spectrum.Licensing of part of the spectrum is available for up to
15 years.Some portions of the spectrum are already encumbered by
current users whose previous licences are due to expire in the near
future.The ACA's functions include administering the use of the
spectrum as 'old' licensees progressively vacate the spectrum.

At present, about 120,000 clients hold some 202,000 licenses
which authorise access to the spectrum.(1)

Maintenance of the spectrum involves activities such as the
investigation of interference in radiocommunications and planning
for the eradication of that interference.Establishing standards for
electromagnetic compatibility for equipment is one way in which
interference can be reduced.Some heavy industrial equipment
(welders), computer installations and navigation equipment can
affect radiocommunications.Licensees will also benefit from the
maintenance and enhancement of international coordination of
radiocommunications.

The holders of the 'old' apparatus licences pay such taxes as
part of the maintenance costs of the spectrum.This Bill and its
companion, the Radiocommunications (Spectrum Licence Tax) Bill
1997, will harmonise arrangements between apparatus and spectrum
licences, and allow the collection of taxes from spectrum
licences.

There is a counter view which questions the government's
approach in auctioning the spectrum.That view holds that with
modern technology there is no scarcity of spectrum and the
licensing of a part of non-scarce resource by the government,
simply because it controls the spectrum, may adversely affect
consumers.That view is contained in the article ' The great
spectrum snow job ' by Stewart Fist in The Australian of 6
August 1996.

Reader's Note: The proposed amendments are included in
Schedule 1 to the Bill.The terminology to be used therefore is
"Item' in the Schedule in lieu of 'Clause' in the
Bill.

Items 2 and 4 are key
provisions in the Schedule in that they expressly add reference to
the proposed Radiocommunications (Spectrum Licence Tax) Act
1997 to both the primary functions of the ACA, as well as to
the additional functions of the ACA.Essentially, the responsibility
for the collection of the spectrum licence tax is to be a
management function of the ACA.

Item 5 adds a reference to the
Radiocommunications (Spectrum Licence Tax) Act 1997 to
Schedule 2 of the proposed Legislative Instruments Act
1997 (the Bill is still before the Senate).The effect of this
amendment will be to require determinations made under the
Radiocommunications (Spectrum Licence Tax) Act 1997 to
comply with procedures specified in the proposed Legislative
Instruments Act 1997.The proposed Legislative Instruments
Act 1997 will introduce a mandatory consultation process for
legislative instruments directly affecting, or having a substantial
indirect effect on business.Government agencies proposing
legislative instruments which affect the business sector must
prepare and make available a proposal which sets out the need for
the regulation, costs and benefits, and alternative ways of
achieving the objectives.

Items 6 to 24 contain minor
consequential amendments to the Radiocommunications Act
1992 and the Radiocommunications Taxes Collection Act
1983 to recognise the introduction of the new form of spectrum
licence tax in addition to the 'older' apparatus licence tax.It is
noted that Item 24 makes it clear that a
corporation established under Commonwealth or Territory law is
subject to the spectrum licence tax.This is the same as applies
under the 'old' apparatus licence tax scheme.

This is a tax collection Bill and it should be read in
conjunction with the companion Radiocommunications (Spectrum
Licence Tax) Bill 1997 (which is the proposed necessary separate
taxing statute).A Bills Digest for the taxing statute accompanies
this Digest.

Brendan Bailey
25 July 1997
Bills Digest Service
Information and Research Services

This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.

IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.

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written consent of the Parliamentary Library, other than by Members
of the Australian Parliament in the course of their official
duties.

Published by the Department of the Parliamentary Library,
1997.

This page was prepared by the Parliamentary Library,
Commonwealth of Australia
Last updated: 23 July 1997